BIM makes light work of estimation
Model-based estimating points the way to greater accuracy, speed and success in estimation and control of cost, which are of paramount importance particularly in the current economic climate, says TAHIR SHARIF, president of buildingSmart ME.
01 May 2010
INACCURATE estimation can cause a business to lose money on a project if costs are underestimated. Equally damaging can be overestimating costs, as it can tip the balance from success to failure at the bidding stage.
Even if this risk can be directed to the contractor – as with traditional fixed price contracts – the project overall will invariably suffer if estimation is poor. With target cost and shared risk/reward contracts becoming more common, the need for accurate estimation has never been greater. A successful business requires the ability to accurately forecast and realise revenue from a predictable and controlled cost base.
A cost estimate establishes a base line of project cost at the different stages of project development. At a given stage, it represents a prediction provided by the cost engineer or estimator, based on available data.
There are a number of approaches to cost estimation in construction but the most common is ‘bill of quantities (BOQ) – unit costs’. In this process, a unit cost is assigned to each of the components or tasks as represented by the BOQ. The total cost is the summation of the quantities multiplied by the corresponding unit costs.
The success of using this method depends upon three key factors – an accurate BOQ; a work breakdown structure (WBS) or standard method of measurement (SMM), which is a well-defined framework for the construction process, creating a series of tasks, structured to enable the allocation of quantities to those tasks; and estimating tools that can perform precise calculations based on the derived BOQ and WBS, reporting the resulting estimates in common or client defined formats.
In actual practice, however, an estimator will have to consider numerous other fixed or variable factors, including inflation, taxes, consumption rates, contingencies and currency fluctuations, among others. As long as these factors are accounted for in the estimating tool, they can be added as part of the overall calculation to maintain accuracy.
Common errors
There are many reasons why estimation goes wrong. The most common are:
• Incorrect or missing data: taking the wrong measurements or quantities from plans is commonplace;
• Poorly structured data, which leads to omissions and errors: a properly engineered WBS takes into account all steps in the construction process and all associated resources, required to complete each step;
• Arithmetical errors, which do not necessarily refer to human error as calculations. However, if variations in national or international labour/material rates, units of measurement are incorrectly applied or accounted for, the overall impact is obvious; and
• Contingency errors: although statistical data can be used for guidance, contingency planning is very much a factor of cost that is dependent upon the experience of the estimator.
Model-based estimating using the building information model (BIM) process and technology provides a solution to all the problems.
BIM benefits
Quantities extracted from a BIM provide the baseline data required to create accurate estimates. Structuring this data correctly is the next step, but when done and linked to the model, estimates can be generated quickly and updated as the design model changes.
Creating an accurate BOQ is essential in any estimating process. The BOQ is derived from the project design drawings, but traditional methods for take-off from these 2D designs, are prone to errors. The risk of these errors is minimised if the project utilises BIM process and technology as BIM is an accurate representation of design; the project is represented by a single model rather than numerous drawings; the model has in-built intelligence and knows what each building element is, what it is made of and how much there is of it, automatically and instantly creating a BOQ; and as design changes are made in the model, the BOQ is automatically updated and therefore is always current.
WBS
However, to derive a meaningful BOQ, it is essential to define the design protocols for the model through a framework such as the WBS.
According to Paul Hewitt, founder of International Project Estimating, “WBS has become a common term in all fields related to cost engineering, including construction cost estimating, scheduling and project cost control. A well-defined WBS is the backbone of good construction estimating software.”
However, due to a lack of an international industry standard, WBS means different things to different people. A comprehensive WBS is, therefore, essential to facilitate proper communication of construction cost estimation and scheduling data between all participants. It should include all phases of the project lifecycle, from conception. It must also be available in formats compatible with the common software applications used to manage these projects.
Having developed a suitable WBS and defined the design protocols to work with it, most of the configuration work required to perform model-based estimating is complete. The resulting configuration can be used for subsequent projects and all that now remains is to select a software tool to perform the arithmetical calculations and present reports.
With the BIM configured to provide correct quantities to the WBS, the actual estimating tool can be selected on the basis that the software is compatible with the WBS format; it can present output reports in common formats and those required to meet the client and project needs; and it can hold the required unit costs.
A case study
With the help of the BIM process, integrating model-based estimating is easy. A case study by International Project Estimating and BIM Engineering Solutions, demonstrates how project contingency for a complex project in Canada, was reduced utilising model-based estimating.
The client was an independent developer bidding on the right to supply power to the government at a fixed rate. The rate would be fixed for a period of 40 years subject only to escalation tied to the consumer rate index. The engineering was only about 20 per cent complete and included a limited number of two-dimensional CAD drawings.
The developer had to provide a firm fixed rate for power supplied, without the completed engineering drawings and to do so within a three-week period. Because of the limited information provided and the short time period, there would be insufficient time to complete the engineering drawings and procure detailed proposals or quotations from contractors and material suppliers.
International Project Estimating joined forces with partners BIM Engineering Solutions of Dubai and Consoft-Asia of Singapore to provide a high-level estimate within the tight time scale, utilising BIM technology. International Project Estimating used its own chief estimator software technology to produce estimates. BIM Engineering Solutions and Consoft-Asia supplied the building information models using their in-house expert engineering resources.
The process required four key steps:
• Generating quantities through development of a 3D model: The 2D DWG drawings were imported into Graphisoft’s ArchiCAD BIM software. The first model created layers consisting of the original ground and rock elevations, based on the geotechnical boreholes. A second model developed included the dam, intake channel, intake structure, power house and site roads. These models were then combined. Volumes of the various excavated materials, concrete quantities, formwork surface areas, building, cladding and roof areas and building finishing quantities, were automatically generated from the model. The completed model was then uploaded to International Project Estimating, where the estimate was being prepared. The model was also uploaded back to the client so that they could ‘walk through’ the model with their design engineer, to confirm project layout and design.
• Importing the estimate from a master WBS: Utilising the fully-developed master WBS, International Project Estimating was able to import complete work assemblies based on estimates developed from similar power projects, generated in previous years. As the assemblies were imported, the quantities were automatically prorated to match the new quantities generated from the 3D model.
• Updating resource rates from a master resource file: International Project Estimating updated the project resource file by changing factors to automatically adjust the resource rates. These rates account for variations in the labour factors such as work hours, overtime, camp and travel provisions. The equipment rates were automatically updated based on the current fuel prices and interest rates. As the WBS was imported from the master WBS, the resources rates were automatically updated to current values from the resource file linked to the estimate.
• Completing the estimate BOQ: The estimator edited the estimate production rates and adjusted crew sizes/makeup, based on local site conditions. Utilising the master WBS and master resource file, International Project Estimating was able to produce a high-level estimate of the BOQ with total confidence. This was because of the accuracy of quantities coming from the 3D model and the similar accuracy of estimated rates based on the master WBS and master resource file. The estimate was then uploaded to the client’s offices for their review.
Conclusion
Using model-based estimating methodology, the client was able to reduce its project contingency and submit its proposal within three weeks. As a result, it was successful in procuring the contract.
